Watertown Continues Steady Growth; Prices Continue to See Appreciation and a Higher Price Ceiling
Key Takeaways:
Increase in gross sales volume indicates more activity among investors
Top end of the market rises with higher percentage of properties selling for over $1mm
New construction sale reinforces desire for turnkey, income producing property
Market Insight: Last year at this time, I said that Watertown was as steady as she blows. This year is more of the same, and there are reasons for investors and multi-family property owners to be excited.
While Watertown did not experience much turnover (3.54% turnover of three-families in 2019), there were several noteworthy sales for multi-family property owners, including the top-end of the market.
The high priced sale in 2019 was a private sale - continuing the trend of properties that set a record price and trade off-market (see Brookline & Quincy). That sale was 34 Walnut Street, which contains a lot-size of 12,840 square feet. This sale was left off my analysis (as it had an abundance of land), but continues to push the Watertown ceiling higher, and allows owners with large-sized lots in Watertown and other areas, get an idea of their market value.
Other sales that will give Watertown landlords reasons to be excited about include the three-family property located at 116 Irving Street. This asset sold for $466 per-square-foot on $7,600 of gross monthly income. The sales price of $1,475,0000 equates to a gross-rent-multiplier of 194x. This is a great price for the seller and a reflection of one of my core takeaway’s for 2019 multi-family owners: investors covet turn-key, income-producing property. While selling property as condos typically produces the highest price, selling them as income property can provide flexibility and reduce the risk of a conversion project, while still obtaining a record-setting price. This is the result that the market produced with the sale of 116 Irving Street.
Although the average sales price of three-family properties in 2019 trended down, a big reason for that was the selling floor. In 2019, the lowest price three-family to sell was 88 School Street. This sale was measured against a small sample size and was enough to push the average sales price down and give the appearance of a dip in the average sales price when compared to 2018.
Outlook for 2020: Looking ahead, I expect turnover to be in the 2-5% range. With Watertown’s proximity to Brighton Landing (and access to Cambridge), I expect Watertown to continue steady growth, providing value to investors who may be priced out of other markets.
In Watertown in 2019, investor-sellers paid an estimated $9,173,358 in capital gains taxes to the Federal Government. For creative strategies to defer taxes and build generational wealth, please see my ‘Free Cash Flow’ Program for sellers, or call me at 617 272 5440.
Please make sure to check out my market reports in Brookline, Cambridge, Chelsea, Somerville, Everett, Medford, Malden, and Quincy. If are interested in selling, please check out my ‘Demand Driver’ or ‘Value Maximizer’ Programs for multi-family sellers or call me at 617 272 5440.
